Court rejects “fanciful” conveyancing negligence claim

High Court: Claimant gave untrue evidence

The High Court has rejected a “fanciful” £600,000 conveyancing negligence claim against the law firm Gateley, based on an error admitted by the firm.

Mrs Justice Tipples described a director of one of the claimant companies, Lawrence Coppen, as an unsatisfactory witness who gave “untrue” evidence.

She said Gateley admitted breach of its duty of care in failing to identify the discrepancy between the Land Registry plan for a development site and the highways plan, which showed that part of the footway encroached on it.

The judge said the only way of dealing with this was to obtain a ‘stopping up order’ from the council to “extinguish the highway rights over the footway”, so the development could go ahead.

Denying the claimants’ loss of opportunity claim, Gateley argued that even if the correct information had been provided in the first place, the transaction would never have gone ahead, partly because the claimants “did not have the financial resources” to do so.

Tipples J said Mr Coppen, director of Taray Investments, gave “untrue” evidence that a company called DJH Cap Limited had agreed to loan Taray £600,000. As a result, she said she would not be accepting his evidence unless it was independently corroborated.

In contrast the judge said she accepted the evidence given by Raymond Simpson, the Gateley partner involved in the transaction.

“Mr Simpson was a careful and measured witness and I am quite satisfied he gave truthful answers to the questions he was asked.”

Tipples J said Alexander Ealey, a director of development company Bellevue, which formed a joint venture to develop the site in Rotherhithe, south London, felt “very aggrieved” as a result of Gateley’s error, as he considered the site a “real opportunity” for his company.

“This meant that, during the course of his evidence, Mr Ealey had a tendency to argue his case, rather than focus on answering what Bellevue would have done if Mr Simpson’s error had been known at the outset.

“In terms of contemporaneous documents, the best guide as to what steps Bellevue would have taken is in the financial information available, and also the vendor’s solicitors’ file.

“I am unable to accept Mr Ealey’s evidence, if it was inconsistent with this evidence or any other contemporaneous documents.”

The claim was brought against Gateley Heritage LLP, the partnership that pre-dated the firm’s public listing in 2015 and is now owned by Gateley PLC.

The High Court heard in Taray Investments and another v Gateley Heritage LLP [2020] EWHC 716 (QB) that the site was owned by the Church of England, and planning permission to redevelop it was obtained in 2012 by the local church.

The church looked for a buyer and in June 2012 Mr Coppen, a finance broker, made an offer through Taray Investments and instructed Gateley to do the conveyancing.

Taray and Bellevue agreed a joint venture to develop the site in June 2012 and secured a loan of over £1.3m from Titlestone in January 2013.

Titlestone’s solicitors, DAC Beachcroft, discovered the coveyancing discrepancy in May 2013.

The local council confirmed later that month that a stopping-up order was needed to deal with the problem; the sale collapsed a few days later.

Tipples J said that, given the good relationship between the parties, it was “somewhat stark” that the deal fell apart so quickly.

She said the reason was that Bellevue would not provide the 10% deposit, £60,000, the church asked for in return for a conditional contract to proceed if the stopping up order was obtained. This was because its money could be tied up for a year and there was no guarantee that the order would be granted

So the prospect of the claimants succeeding in acquiring and developing the Rotherhithe site was “fanciful in the circumstances and their claim against the defendant fails”.

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